“Propelled by its conviction that current regulation doesn’t adequately defend retirement buyers, the DOL has defied Congress and the Fifth Circuit by adopting new guidelines nearly indistinguishable from a predecessor 2016 regulation that was emphatically struck down by the Fifth Circuit,” the submitting states.
“Whereas the core holding of the Fifth Circuit choice was that not all monetary salespeople are fiduciaries underneath ERISA, the DOL’s new regulation now decrees that any insurance coverage agent who merely complies with state insurance coverage legal guidelines when coping with an ERISA plan member or proprietor of an Particular person Retirement Account … is a fiduciary,” the lawsuit continues.
“By doing so, the DOL exceeds its authority and devises guidelines which can be opposite to regulation, arbitrary, and capricious,” the submitting states.
The brand new fiduciary rule and amended PTE 84-24 first take impact on Sept. 23, 2024, the lawsuit continues.
“Revised PTE 84-24 incorporates a phase-in interval of 1 12 months throughout which sure supervisory necessities imposed on insurers don’t apply,” the lawsuit explains.
“Nonetheless, in the course of the phase-in interval, the Brokers should nonetheless adjust to onerous necessities that embody acknowledging to purchasers that they’re fiduciaries. They need to additionally fulfill the exemption’s ‘Neutral Conduct Requirements,’ which incorporates compliance with a ‘Care Obligation’ and ‘Loyalty Obligation’ relevant to ERISA fiduciaries, and obtain not more than ‘cheap compensation,’” the lawsuit states.
“The Brokers should instantly start incurring the time and expense of making ready for the phase-in interval necessities that take impact in simply 4 months,” the lawsuit states.
“Accordingly, preliminary injunctive aid is required to keep away from irreparable hurt in the course of the pendency of this lawsuit.”
